What are IHG points worth?

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IHG doesn’t have an award chart.  Award prices closely follow cash rates, but there’s enough variance that we can’t simply use a formula to determine what points are worth.  Instead, we observe cash and award rates to see, in practice, how much points are worth.  This post has been updated with new data and a new improved analysis method since its previous publication in April 2022.

Background

When collecting points and miles, it’s always a good idea to have a general idea of what points are worth.  Let’s say, for example, that you have the opportunity to either earn 1,000 Hyatt points or 2,000 IHG points.  Which should you go for?  If you don’t know what the points are worth, you’d likely go for the IHG points.  But, in my analyses I’ve found Hyatt points to be worth about three times as much as IHG points.  Therefore, on average, 1,000 Hyatt points are worth considerable more than 2,000 IHG points.  In this post, you’ll find my best current estimate of the value of IHG points.  To see our estimates across many programs, see this post: Reasonable Redemption Values (RRVs).

Methodology

In order to determine the value of IHG points, I collected real-world cash prices and point prices.  As I’ve done previously, I examined a number of major hotel markets in the U.S.: Chicago, Denver, Los Angeles, Las Vegas, Miami, New York City, Orlando, and Seattle. Within each market, I identified the first three search results with standard award availability and a guest rating of 4 or better, and I recorded both cash and award prices for three dates each: a weekday, a weekend, and a holiday weekend.

  • Why U.S. only? U.S. consumers are known to spend most of their points and miles on domestic travel.  Since the majority of this blog’s audience resides in the U.S. we opted for a U.S. centric view of point values.
  • Why Guest Ratings? The goal wasn’t to find the 3 best IHG hotels in each market. Instead, the goal was to find 3 IHG bookable hotels that are very popular.  Which ones are people really likely to book?  By using a combination of IHG’s default sorting and by picking only well rated hotels, I think it’s reasonable to assume that many members would pick these hotels.
  • Which paid rates were selected?  I always picked the best fully refundable paid rate shown on IHG’s website, but without applying any discounts like AAA, military, government, etc.  For this analysis, I always selected IHG’s member rate.
  • Which specific dates did I use?  
    • Weekday: Wednesday April 12, 2023
    • Weekend Day: Friday April 14, 2023
    • Holiday Weekend Day: Saturday April 8, 2023 (Easter Weekend)

New Calculation Approach

Starting 12/5/2022 with my Hyatt analysis, I began calculating Cents Per Point (CPP) using new formula.  In all past hotel CPP calculations, I didn’t account for taxes and fees or points earned on paid stays. I figured that those things basically cancelled each other out.  Going forward, I am including these factors, as well as resort fees, in the CPP calculation.  The calculation is based on the following terms:

  • Base Cash Rate: This is the hotel room rate before taxes and fees.
  • Total Cash Rate: This is the total amount, including taxes and fees, that would be paid if booking a hotel’s cash rate.
  • Resort Fee: This is a fee that is imposed by many hotels above and beyond any required taxes.  This goes by different names at different hotels: Resort fee, Destination charge, Founders fee, etc.
  • Points Per Dollar Earned: The number of points per dollar earned by non-elite members on paid stays.  For example, Hyatt members earn 5 points per dollar, Hilton, IHG, and Marriott members earn 10 points per dollar (at most hotels), etc.
  • Points Earned on Cash Rate:  This is the number of points you would earn if you paid the cash rate.  The calculation for this is: (Base Cash Rate) x (Points Per Dollar Earned).  For this calculation, our default approach is to assume that the traveler does not have elite status (elite members earn more points per dollar).
  • Point Price: The number of points required to book a night at the hotel
  • Cents Per Point (CPP): This is the value you get per point when using your points instead of cash to pay for a stay.

Hotel Programs that Waive Resort Fees on Award Stays

Hilton, Hyatt, and Wyndham waive resort fees when you book stays using points or free night certificates.  For these chains, the resort fee does not have to be considered separately from the Total Cash Rate (which includes the resort fee).  So, the CPP calculation is as follows:

CPP = Total Cash Rate ÷ [Point Price + Points Earned on Cash Rate]

Hotel Programs that Charge Resort Fees on Award Stays

IHG, Marriott, and many other hotel programs impose resort fees on award stays.  For these chains, the resort fee must be specifically taken into account in the CPP calculation. We do that by subtracting it out of the Total Cash Rate. The CPP calculation is as follows:

CPP = [Total Cash Rate – Resort Fee] ÷ [Point Price + Points Earned on Cash Rate]

Results

Point Value

Analysis Date: 12/19/22 4/16/22 4/9/21 4/4/21 6/2020
Point Value (Median) 0.63 0.59 0.64 0.43 0.64
Point Value (Mean) 0.62 0.60 0.58 0.54 0.67
Cash Price (Median) $297 $253 $238 $238 $213
Cash Price (Mean) $355 $281 $233 $237 $229
Award Price (Median) 44,000 43,000 40,000 47,000 35,000
Award Price (Mean) 52,209 46,857 45,286 48,952 34,603
Minimum Point Value 0.45 0.39 0.28 0.28 0.40
Maximum Point Value 0.73 1.11 0.98 0.98 1.29

* Analyses prior to 12/5/22 relied on pre-tax numbers and didn’t account for points earned on paid stays. For this reason, I grayed out the numbers that can’t be fairly compared to the most recent numbers.

The median observed point value was 0.63 cents per point.  This means that half of the observed results offered equal or better point value and half offered equal or worse value.  Another way to think about it is that without trying to cherry pick good awards, you have a 50/50 chance of getting 0.63 cents or better value from your IHG points when booking free night awards.

The above analysis makes it look like IHG points have become slightly more valuable since the median changed from 0.59 to 0.63.  In reality, the difference is due to the new improved methodology.  When I used the new data and calculated the median with the old methods, the median actually dropped to 0.57.

Pick your own point value

Analysis Date: 12/19/22 4/16/22 4/9/21 4/4/21 6/2020
50th Percentile (Median) 0.63 0.59 0.58 0.43 0.67
60th Percentile 0.64 0.61 0.66 0.62 0.70
70th Percentile 0.65 0.62 0.68 0.68 0.73
80th Percentile 0.67 0.63 0.75 0.71 0.76
90th Percentile 0.69 0.65 0.80 0.80 0.86

* Analyses prior to 12/5/22 relied on pre-tax numbers and didn’t account for points earned on paid stays. For this reason, I grayed out the numbers that can’t be fairly compared to the most recent numbers.

When we publish Reasonable Redemption Values of points (RRVs), we conservatively pick the middle value, or the 50th percentile.  The idea is that just by randomly picking hotels to use your points, you have a 50/50 chance of getting this value or better.  But what if you cherry-pick awards?  With some other hotel programs, the 80th percentile cents per point is much higher than the median.  And this used to be true with IHG too, but in recent analyses I found that the 80th or even 90th percentile was only slightly higher than the median.  To be clear, there are cases where you can get better than 0.69 cents per point value, but the chance of stumbling upon that higher value is surprisingly low.

To me, this analysis shows that even those who cherry-pick good value awards can’t count on regularly getting much more than 0.63 cents per point value with properties within the U.S.  That’s unfortunate.

New Reasonable Redemption Value: 0.63

Our Reasonable Redemption Value (RRV) for IHG points was previously set to 0.6 cents per point.  With the new methodology in place, the value went up a tiny bit to 0.63.  RRV’s are intended to be the point at which it is reasonable to get that much value or better for your points.  In this case, it’s not necessarily easy to get much more value, but it’s definitely easy to get around 0.63 cents per point value.

  • Reasonable Redemption Value for IHG: 0.63 cents per point (unchanged)
  • Reasonable Redemption Value for those who cherry pick awards: 0.67 cents per point

Overvaluing vs. Undervaluing Points

There is no perfect way to estimate the value of points.  Decisions we made here in some ways overvalue points and in some ways undervalue points.  The hope is that these things roughly offset each other…

Factors that cause us to undervalue points

  • With hotel programs that offer 4th Night Free Awards (IHG, with some credit cards), or 5th Night Free Awards (Hilton & Marriott), or award discounts (Wyndham), we do not consider the point savings in our analyses.
  • With hotel programs that offer free parking on award stays to top-tier elites (Hyatt), we do not factor this in.

Factors that cause us to overvalue points

  • We do not use discount rates (other than member rates) in our analyses.  In real-life, many people book hotels cheaper (and sometimes far cheaper) by using AAA rates, government & military rates, senior rates, etc.
  • We do not use hotel promotional rates.  Often, individual hotels have deals such as “Stay 2 Nights, Get 1 Night Free” which can greatly reduce the cost of a stay.
  • We do not use prepaid rates in our analyses.  Sometimes these rates are significantly lower than refundable rates.
  • We do not factor in rebates which can be earned from booking hotels through shopping portals.
  • We do not factor in extra points earned on paid stays for those with elite status.
  • We do not factor in rewards earned from credit card spend at hotels.
  • We do not factor in hotel loyalty program promotions: Most promotions, but not all, only offer incentives for paid stays.  We often see promos offering bonus points, double or triple points, free night awards, etc.
  • With hotel programs that waive resort fees for top tier elites on paid stays (e.g. Hyatt), we do not factor this in.

Conclusion

Based on the latest analysis, I increased our IHG RRV from 0.6 to 0.63 cents per point.  The increase is due to our new and better methodology which now takes into account taxes which are not charged on award stays and resort fees which are.  Further, the latest percentile results show that those who cherry-pick awards (80th percentile) can expect to get around 0.67 cents per point.  That’s not very different from the median.  It shows that opportunities for getting far outsized value from IHG points have dwindled with time.  Sad.

For a complete list of Reasonable Redemption Values (and links to posts like this one), see: Reasonable Redemption Values (RRVs).

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Ric Garrido

My methodology is much simpler. I look at the hotel rate and compare that rate to what a reward stay using points will cost using the value of $5 per 1,000 points.

I purchased 270,000 points at $5 per 1,000 points in 2022.

I averaged about $60 per night using IHG points for 35 nights in 2022. I paid $709 for six nights at Hotel Indigo Krakow and earned 54,000 points.

In 2022 I redeemed points in Lisbon, Portugal; Thessaloniki, Greece; Madrid, Spain; Gdansk and Krakow, Poland with 28 nights booked using 4th night free rate for an instant 25% discount.

For 2023 stays I have Diamond elite status with the choice of free breakfast, annual lounge access and 2 suite upgrades to use.

My redemption value in 2022 has ranged from a low $6.53 per 1,000 points for one 15,000 points night at Crowne Plaza Madrid Airport to $13.91 per 1,000 points for 4 nights in June at 48,000 points at Holiday Inn Express Av Liberdade in Lisbon.

My most recent points redemption used 84,000 points ($420) for 5 nights when the published rate would be $630. That is $7.50 per 1,000 points redemption value.

A snapshot of IHG rates is only data points based on that day. I typically book IHG reward stays, cancel and rebook them two or more times as reward rates change with IHG dynamic pricing.

I have a stay in Amsterdam booked in Nov 2022 for 20,250 per night. That same hotel is now 32,500 points per night.

Book reward stays early and check back periodically for lower rates.

Ric Garrido

A correction in above comment. I purchased 420,000 IHG points for $2,100 in 2022.

I

Dave Hanson

Thanks for the update Greg.

I do think Eric is correct to question your focus on big cities.

IHG is a great complement to a big-city focused chain like Hyatt precisely because they have so many properties in more rural or even second-tier areas. So for example, Hyatt has several properties in Washington’s major market (Seattle-Tacoma), but none at all in its second biggest market (the greater Spokane area on the state’s east side). By contrast, IHG has several properties not just in rural areas statewide, but in the Spokane area. And in my experience, the IHG point value in the less populated areas tends to be higher.

Indeed, as a longtime Hyatt Globalist and IHG Diamond, I find the two programs complement each other quite well.

Last edited 1 month ago by Dave Hanson
Jeff

But if you simply do the 4th night free, then your rrv would be 1.33x more, or .84 cpp. That’s easy to get. If you also have the old IHG card you get 10% back on top of that, putting the value around .924 cpp. That is relatively easy to accomplish as long as you do a four night stay. It is the reason I have bought points (and gotten more than 1cpp, though that was in Vietnam). I know you include that in the disclaimer, but given how cheap IHG points are to buy and the low threshhold of four nights I find this doable, whereas I’ve only once been able to take advantage of a Hilton or Marriott fifth night free.

Jeff

I would add value to IHG bc of 4th night free awards and the cheap cost of points. I would not add value to Hilton or Marriott based on their fifth night free.

Eric

I wonder if there might be more higher-value bookings if you considered random locations instead of three places in each of the big cities. I did quite a bit better than 0.65 at a Candlewood in Wyoming for this summer. That’s also an area where IHG (as well as Marriott and Hilton) shines in comparison to Hyatt – the closest Hyatt is about a 4.5 hour drive away.

Not saying the methodology is wrong at all, just that I suspect that’s where more outsized value is available now. (It’s a different program, but on the same trip I reserved a $400 Fairfield for 20k Bonvoy points)

[…] What Are IHG Points Worth:  Now that IHG has revamped their rewards program, the value of their points have increased.  Valuing points is subjective, as what appeals to one person won’t appeal to the other.  Yet this should give you a good idea of the value you can get from IHG points now. […]

WR2

Just wondering when you’ll ever see the light that when it comes to redemption: averages are meaningless. When you choose to use points, do you shoot for average? When choosing from options from a given destination, do you choose the average? No, you choose the best bang for the points. You selectively choose when to use points based on the destination, and the options at that destination. If there’s not a good points option then you pay cash, right? So then how in that context does averaging make any sense whatsoever?

This methodology just plays right into Marriotts hand of turning their program into a cashback rebate program (that is only redeemable at Marriotts, so much worse than cashback). It defeats the whole purpose of points and loyalty. Sorry, but I reject your entire premise of this, and your Marriott valuation claiming that the point values have gone up, which was the most ridiculous thing I’ve ever read on your blog.

Last edited 9 months ago by WR2
stvr

Did you read the post? They did percentiles. The percentiles showed there were no “bang for buck” redemptions. It’s all 0.6 cents up and down the food chain.

***

What I’m hearing is that you can buy at 0.5 cents per point and redeem at 0.6 cents per point. Combine with 4th night free and 10% rebate, and you can get four $100 hotel nights for $225. That’s a 43.75% discount just for being a “cool kid” in the know. I’ll high five Frequent Miler for that.

***

This reporting is great for Holiday Inns by airports in Texas. This is not so good for the Cayman Islands on Christmas. It is what it is.

WR2

Yes I did, did you not ready my reply? I’m saying programs that give you rewards as flat cash rebates are garbage, and you’re telling me that you like that. OK, so my question to you: why bother with loyalty then? You can earn cashback easily, and at better rates than Marriott or IHG is offering, no loyalty needed. Enjoy your holiday inn express in texas with powdered egg breakfast, is that the reward you want for being loyal? Whatever, you do you, you deserve what you settle for.

Cavedweller

I had every Hotel brand card up to 4 years ago then dumped them mostly worthless.If u can find a hotel that works go for it .My best airport hotels were in Nice,France like $100 or free 4 years ago.All the brands are there and they open up for their 4* Breakfasts at 5am with Super Service too. ..
Not everyone can spend $500k on their cards every year.

Enjoy ur Trips !!!

tassojunior

On the method, of course the normally 10% tax should be factored in as saved so 6.6 cents. I have the 10% rebate card so that would make mine 7.2. I also use 4th night free so that’s almost 10 cents. The flexibility of awards is another + variable.

But even with all the add-on benefits, I still barely pass 5 cents pre tax. The 10% sales tax saved is actually the biggest perk.

Last edited 9 months ago by tassojunior
LarryInNYC

Tax varies, sometimes a great deal, from 10% and is close to cancelled out by points earnings on paid stays.

nate

I find myself using IHG points at my go-to Philadelphia staycation hotel in the Winter, where paid rates are high but the point redemption value is a bargain (especially with the legacy 10% off IHG card). The Monaco in Philly can be as low as 29K points in the winter where rates are about $230/night. We’ve been there so often we usually get upgraded to an Independence Mall view corner spa room, which is a real treat. We live in Philly but always take a weekend away to act like tourists and get some cheesesteaks and enjoy the view.

Gene

@ Greg — I still cannot bring myself to value IHG points above 0.5 since they are available for purchase at that rate so frequently. They don’t sell points to lose money. I am thrilled to get 0.65 cpp, but sadly the days of booking the IC Willard for 70,000 points per night for the Presidential inauguration are likely over.

Jeff

That hits on something here: IHG isn’t losing money but their (independently owned) hotels are. Those hotels get shockingly low reimbursements. View from the Wing has listed some of these for Marriott. So with these .5c points sales IHG is taking in a lot more money than they pay to their hotels.

Alan

I have example that IHG pays more to the hotels that I paid in points assuming 1000 points is 5USD

Jeff

Interesting data point. I was relying on what I read from Gary Leff in View from the Wing. His data came mostly from Marriott, I believe. I assumed that IHG was about the same but your comment suggests that may not be so.

Alan

An example is that I stayed in HIX in bangkok for 5k points per night, after 4th night free and10% rebate, it was 13500 points and 500 points welcome amenity. 13000 points is net cost to me. The folio shows the hotel got 33xx THB for my stay which is around 100 USD.

Jeff

In other words, these cheap points sales generate positive net revenue for IHG but are probably not good for the hotel owners who must accept the low reimbursements for award stays.